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8 Hints How to Make a Student’s Loan the Most Affordable

Wednesday, January 10, 2018

All families want the best education for their children, but not all of them can provide it. That’s why student loans are essential. They enable students to pursue the career paths they envision for themselves. Student loans often make headlines. The statistics are shocking, to say the least. In the USA, there’s $1.3 trillion in student loan debt from over 44 million borrowers. The student loan debt from an average student in the Class of 2016 is $37.172. However, student loan debts are considered good debts. You’re borrowing money for the purpose of building value and enhancing your future. You’re taking this loan to pay for your education, which enables you to get a good job as soon as you enter the job market. With that job, you’ll pay the debt.      
Still, the process of repaying the loan is challenging. That’s why it’s important to think about affordable student loans. We’ll give you 8 hints on how to make your student loan as affordable as possible.

1. Start Your Search for a Loan with Federal Options
The federal government is the best source of student loans. If you fill in the free application for federal student aid (FAFSA), you may be offered loans as part of the school’s financial aid offer. The U.S. Department of Education offers two programs for federal student loans:

Get informed about these options! They are usually the most affordable ones and they offer better protection in repayment. Compare the different types of federal loans to get the one that works for you.

2. Consider Borrowing from People You Know
A person-to-person lending service allows you to get a formal loan from people you know. Instead of getting a loan from the bank, you find your lender and use the service to make things formal. You and your lender will agree on the rate, and you’ll decide when the repayment will begin.  

3. Graduate as Soon as Possible
The longer you stay at school, the more money you’ll need to borrow. If you want this to be a smart investment, you need to graduate as soon as possible, so you’ll start working and repaying the loan.

Be a dedicated student. Complete all projects on time. If that’s not possible, hire RushMyEssay.co.uk or another writing service to help you keep up with the deadlines. If you’re an effective student and you enter the job market right after graduation, the loan will be a cost-effective investment.

4. Cover the Principle
When you get to the point of repaying the loan, a big percentage of your earnings will go to paying off the interest. You can make the loan more affordable if you reduce the amount of interest you pay. How can you do that? Easy: pay down the principal of the loan.

This means that you’ll need to pay more extra than the minimum monthly payment.  

5. Consider an Income-Based Repayment Option
If you’re struggling to make loan payments with your first job after graduation, you can choose an income-based repayment program. If you opt for this alternative, the required loan repayment will be 15% of your salary. That won’t make the entire loan more affordable when looking on the long term, but it will definitely make the rates cheaper, and that’s what you need when you’re struggling with finances.

6. Choose the Right Repayment Plan
If you don’t choose a specific repayment plan, you’ll be automatically enrolled in the Standard one. It’s a convenient plan, but it’s not necessarily the most affordable one in your case. That’s why you need to compare different repayment plans and choose the one that works for you.

7. Check if You’re Eligible for Student Loan Forgiveness
Many students are eligible for forgiveness of federal loan, but not all of them use that opportunity. The Public Service Loan Forgiveness Program, for example, offers full direct forgiveness to people on public service positions after 10 years of loan payments.

You don’t have to be in public service to get forgiveness. Check what circumstances can get you loan forgiveness. If you’re eligible, you should apply as soon as possible.

8. Consider Student Loan Rehabilitation
If you were unable to make the payments on time and your loan went in default, your credit report is dramatically damaged. Loan rehabilitation is the only way to fix the issue. You’ll agree to make nine or ten consecutive monthly payments, based on your income. That will remove the default notation on your credit report.

As troublesome and expensive student loans are, they are very useful for your future. Hopefully, the tips we suggested above will help you make your loan more affordable.                        

About our guest blogger: Brandon Stanley is a professional independent journalist. He is also interested in writing articles concerning education and college life. Apart from that, Brandon loves traveling and playing the piano. Follow him on Facebook and Twitter


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